As a payments industry professional, I can't help but to sit back with my jaw dropped at the incredible waste the industry is about to undergo. EMV is about 15 years old, it only helps secure the card present environment (versus e-commerce which is what is really growing), it has weaknesses and an attack vector including decryption of the card data at the terminal interface, and, at best, only provides for dual factor authentication.

If we are to invest in a technology looking ahead instead of behind us, we should invest in Host Card Emulation (HCE). With its flexible cloud architecture, HCE can provide multi-factor authentication in both card present and card not present environments via a smart phone. Whether standing in front of a retailer, or placing an order online, the user can enter their PIN number on their phone with credentials stored in the cloud. Additional security measures can include geo-location of the phone itself, device MAC fingerprinting, biometric if desired (such as fingerprint, iris scan, or voice print), etc.

The current counter argument is what to do if there is no signal/connectivity. I liken this to the current situation of wireless terminals at events that cannot find a signal. There are several things that could be done to address this including allowing for storage of a single authenticator which would provide for at least dual factor authentication (having the phone, knowing the authenticator). Another option would be to allow "store and forward" type of activity where the phone would temporarily allow for storage of the consumer's authenticators and run the authorization once connectivity has been restored (merchant decision on accepting the sale without full authentication or issuer predetermined parameters around such an event).

All in all, HCE is a new technology that is very promising in its flexibility, dynamic capability, and broad range of fraud reduction across payment channels. HCE is the direction in which we should be going.